I'd never even heard of this, but how cool! You can re-size a much too large frumpy shirt into one that fits nicely with a cute little pattern, using minimal sewing. The tutorial on Handmade with Love (click on the name to see the tutorial) shows exactly how to do the braid, which requires slits to be cut into the fabric and no extra tools or fabric. The only sewing is to hold the braid in place at the end so that it doesn't unravel and can be done by hand.
The braid can also be done on the sleeves, and can probably be used to make a cute neckline on a much too big shirt. I may actually use it on the neckline to make a dress for my daughter out of an old teeshirt of mine or my husbands. Old shirts make fantastic dresses and nightgowns for toddlers, as they're worn to a very comfortable feel. If/when I do, I'll be sure to share!